By John Helmer in Moscow
Sergei Stepashin, the head of the Accounting Chamber, Russia’s state auditor, has issued a press leak, claiming he was responsible for the firing of Alrosa chief executive, Sergei Vybornov, after a Chamber audit of Alrosa earlier this year had identified multiple problems, and what Stepashin is publicly quoted as calling “numerous infringements in company activity”. According to reports by news agency Interfax and a Moscow daily business paper, Stepashin, a former Russian prime minister, has claimed that the results of the audit led to the firing. “For this reason,” Stepashin is quoted, “we recommended the replacement of the president of Alrosa.”
Among the “infringements” triggering Stepashin’s call to remove Vybornov, it is now being reported that Alrosa sold rough diamonds to the state stockpile agency Gokhran at a price alleged to have been greater than the export price of the stones.
According to independent testimony by one of the auditors who took part, Angelica Zadorozhnaya, the Accounting Chamber investigated Alrosa’s books early this year. She told PolishedPrices.com that the completed audit report had then gone to the collegium, as the Accounting Chamber’s highest body is known, in April. She also said that this session decided to impose a state secrecy classification on the report.
When asked why he had breached this secrecy to charge Vybornov publicly, Stepashin’s spokesman, Yekaterina Paristaya, replied: “the Audit Chamber could not give Vedomosti [newspaper] quotes from the audit documentation, because it’s obviously classified information. What Vedomosti could really get were comments by audit officers, but again, no copies of documents. At least, that could not happen officially.”
She refused access to one of the chief auditors involved, Mikhail Beskhmelnitsyn. She confirmed that Stepashin had recommended firing Vybornov in his report to other government ministries represented on the board of Alrosa. She also said that one of the reasons for this recommendation was the falling profitability of the company in 2007, the first year Vybornov served as chief executive. Zadorozhnaya claimed that the 19.6% profitability calculation reported by the Chamber for 2007 was down from 20.5% in 2006, and 20.9% in 2005. This decline, Paristaya told PolishedPrices.com, “is tangible enough to accuse Vybornov.”
Last Thursday, at a meeting of the Supervisory Board of Alrosa, Vybornov’s resignation was accepted, and his place filled by Fyodor Andreev, a former chief financial officer of Alrosa, who has been occupying the CFO role at the state-owned Russian Railways Company for almost six years. Andreev is a financial salvage expert trusted by federal government officials to clean up the problems which the Accounting Chamber audit has reported. These are believed to be in addition to, and more serious than, the single percentage-point drop in profitability which Stepashin and his spokesman aired in their press leak.
Stepashin was asked to clarify how the audit, which also focused on Alrosa’s financial performance in 2005 and 2006, before Vybornov was appointed chief executive in February of 2007, could have been relevant to his performance as CEO. Stepashin declined to say. His spokesman also refused to clarify how the difference in pricing for the sale of diamonds to the state stockpile and to export buyers like De Beers was calculated by the state auditors in framing their allegations against Vybornov. Vybornov’s spokesman says the latter is away from Moscow on vacation.